A Brief Outline of Undisclosed Costs of Regulation

In my recent Forbes column “Rule of Flaw and the Costs of Coercion,” I discussed checks on the administrative state, as well as some of the roots of bureaucratic governance. While there is always heated discussion about the costs of regulation, it is apparent that less is known than unknown about the scope of federal regulation and its social and economic effects. And the command vs. individual rights approaches to government make any agreement or resolution impossible. The extensive gaps in what we know about federal regulatory costs are of little concern to the philosophy of governance that created the administrative state in the first place—but they matter from the standpoint of individual liberties and constitutional order.

Below is an inventory of undisclosed and unfathomed costs of regulation and burdens—sometimes depredations—of the administrative state. See “Rule of Flaw” and “Ten Thousand Commandments” for some framing of the general issue, and watch this page for links to capsules on some of the outlined items. 

ADMINISTRATIVE STATE: A SURVEY OF UNMEASURED COSTS

I. Unmeasured Costs of Shortcomings in Administrative Procedure Act Oversight

A. Rule Cost Categories Prone to Escaping Measurement and Disclosure

• Costs of Rules Not Deemed “Economically Significant” by Agencies That in Fact Are
• Costs of Independent Agencies’ Regulations
• Costs of Unfunded Mandates on States and Localities
• Costs of Interpretive Rules and Guidance Documents
• Indirect Costs
• Job Costs of Regulation

B. Process/Oversight Shortcomings Generating Unknown Financial and Societal Costs

• Costs of Abandonment of Formal Rulemaking
• Costs of Agencies’ Failure to Issue a Notice of Proposed Rulemaking (NPRM) for a Significant Portion of Rules
• Costs of Agency-Gamed Notice-and-Comment Processes
• Costs of Agencies’ Undermining the Congressional Review Act by Failing to Submit Final Rules to the Government Accountability Office and Congress for Consideration
• Costs of Baked-In Pro-Regulatory Bias of the Administrative State
• Costs of Policy Uncertainty that Disrupts Economic Activity
• Costs of Regulation by Sue-and-Settle Agreements
• Costs of Regulatory Accumulation
• Costs of Differential Effects of Rules on Businesses
• Costs of A Regulatory Bell that Tolls for All

II. Unmeasured Meta-costs of the Administrative State from Classical Liberal and Individual Rights Perspectives

• Costs of the Loss of Liberty
• Costs of Regulatory Takings and Property Value Destruction
• Costs of Abandoning Negative Rights for a Positive Rights Framework and Unequal Treatment of Citizens Under the Law
• Costs of Delegation of Lawmaking Power to the Executive and to Unelected Administrators
• Costs of Congress’s Routine Disregard of the Congressional Review Act
• Costs of Agency Self-Funding
• Costs of the Impossibility of Eliminating Agencies
• Costs of Paternalism and the Normalization of Dependency
• Costs of Imposing Regulation Based on Secret (or Creatively Leveraged) Data
• Costs of Abandoned Federalism
• Costs of Authoritarianism and Over-criminalization
• Costs of Loss of Anonymity in the Administrative Surveillance State

III. Costs of Spending and Legislative Programs with Sweeping, Disregarded Regulatory Effect

• Costs of Top-Down National Plans, Agendas and Legislative Schemes, and Treaties
• Costs of Economic Distortions Caused by “Ordinary” Federal Spending, Subsidies and Stimulus
• Costs of Deadweight Effects of Federal Spending and of “Budget” or “Transfer” Rules
• Costs of Government Spending to Steer Investment in Science and Technology

IV. Dripping with Market Socialism: Costs of the Administrative State’s Derailment of Market Institutions

• Costs of the Presumption of Agency Expertise (and Denial of Non-Expertise and Disruption)
• Costs of the Market Failure Fallacy, and the Disregard of Government Failure
• Costs of Interference with Price, Distribution and Access Mechanisms
• Costs of Antitrust Regulation and the Institutionalization of Raising Rivals’ Costs
• Costs of Blurring Corporate and Government Roles with Government Sponsored Enterprises and Public/Private Partnerships
• Costs of Government Steering by Direct Ownership or Control of Resources
• Costs of Abandoning Enlargement of Property Rights Institutions in Favor of Political Path Dependence and the Barring of Regulatory Exit
• Costs of Establishment and Perpetuation of Hyper-Regulatory Public Utility, Siloed-Infrastructure Models that Preclude Larger-Scale, Higher-Level Capitalism
• Costs of Anti-Property Approaches to Environmental Amenities and Concerns
• Costs of Permission-Seeking and Over-Licensing
• Costs of Cronyism: The Thoroughgoing Centrality of Rent-Seeking and Rent-Extraction in a Self-Preserving Administrative State
• Costs of Rent-seeking by the So-Called “Deep State”

V. Wrong Tool: Costs of Anti-benefits and Lethality

• Costs of Failure to See Benefits as Forms of Wealth
• Costs of the Precautionary Principle and the Derailment of Normal Evolutionary Risk-Management Innovation
• Costs of Selective Expression of Benefits
• Costs and Distributional Abuses of the Net-Benefit Pursuit
• Costs of Ignoring General Wealth and Health Reduction Induced by Regulation
• Health (as Distinct from Economic) Costs of Rent-Seeking
• Costs of Undermining Markets in Information
• Body Count: The Costs of Death By Government

VI. Compound Fracture: Costs of the Foregoing Propagated across Centuries

This post has been updated to include links to subsequent posts.